Let's talk about investing! Stock market, ETF, etc.

[chipwhich]

 

For every person that it works for, there are probably 99 or 999 who it doesn't work for. I think even chip admitted that his process relies a lot on intuition, although I don't discount intuition because I think our brains process information in ways we don't consciously understand. And like you two said, the chase is fun for y'all. I do other things for fun—this is just "buying a groceries" for me. 

 

I don't disagree with Techboy in the basis of his investing theory.  What I disagree with is his fixation on jumping into every thread on investing and saying the only way to invest is in an index fund.  Truth is, in his own life he puts money into other things, a house, a savings account, whatever.  The grandstanding on the index thing....we get it.

 

Like I said, I like to buy junk with some expendable income I have.  I have been very successful.  Unfortunately, lately the market is on such a tear, there aren't really any what I would call bargains.

 

The last stock I picked up is some BP PLC stock.  Its been beaten down as of late, I picked it up last time about $36 a share, it pays a 5-6% dividend depending on price, rumors of Exxon buying them.  The stock is on another downward trickle getting close to where I put in a limit order.

 

You won't get 6% interest at a bank, that with what I see as some potential upside is my pick I am watching.

 

With regards to FitBit, I wouldn't buy it because I think the market for fitness wristbands is extremely saturated, although my wife, daughters all wear fitbits daily and the scale in our house is a FitBit scale, my daughter also has a fitbit scale in her apartment in college.

Edited July 2, 2015 by chipwhich

[Elessar78]

That Kahneman/NYTimes article is a good read. The good news is that if the pros are doing no better than, statistically, blind luck—then the Joe off the street has about as much chance to be successful than the pros. 

[Springfield]

Got out of DUST this morning and into NUGT. Hoping to hold NUGT for the day only because that this is a clunker. I don't like it one bit.

[chipwhich]

Got out of DUST this morning and into NUGT. Hoping to hold NUGT for the day only because that this is a clunker. I don't like it one bit.

 

Keep in mind you have to pay taxes on all your gains.  Constantly flipping stocks might end up being a pain in the ass when filing taxes.

[Springfield]

Keep in mind you have to pay taxes on all your gains. Constantly flipping stocks might end up being a pain in the ass when filing taxes.

HR Block?

[Corcaigh]

HR Block?

 

Your broker should give you a statement for tax time that makes it clear, and which is taxed at the higher rate. If you hold them less than a year you will likely be paying more tax on the gain.

[Corcaigh]

There's gold in them thar hills. Usually the ones making money are the folks selling pick axes (Charles Schwab), and ancilliary services such as bars (Motley Fool) and brothels (Goldmann Sachs).

Edited July 2, 2015 by Corcaigh

[Springfield]

Your broker should give you a statement for tax time that makes it clear, and which is taxed at the higher rate. If you hold them less than a year you will likely be paying more tax on the gain.

Understood. I figured there would be a year end summary that would tie it in a bow.

[Forehead]

OK, cue Techboy........

 

 

 

 

BRINGS IT!!!

 

 

[Predicto]

And there's property tax.

 

 

You're right, property tax is ridiculously low out here given the value of the homes.   That is what has destroyed the California budget, schools and roads.   I forgot to mention that.

[Springfield]

NUGT was no good today. Sold a whole three pennies higher than I bought. FIT had its up and downs. I'll stick with that one for a little while longer but I do think FIT isn't a great long term option.

[chipwhich]

 

Stupid posts deserve stupid responses, but if ya want to be one of the average.

 

NUGT was no good today. Sold a whole three pennies higher than I bought. FIT had its up and downs. I'll stick with that one for a little while longer but I do think FIT isn't a great long term option.

 

Dude, seriously don't day trade.  You aren't gonna make any money. 

[Dont Taze Me Bro]

Dumb it down for me.  If one was wanting to start dabbling in buying stocks and selling, what is the best software/website to do this through?  A few years ago one of my friends was telling me that he did this and over the years has come out on the positive overall.  Though he said like gambling, you spend your time in the red a lot as well.

 

I thought he used some type of software, could have been web based.  I'm looking to play around with it, toss in some extra money, hope I hit on some things, make some cash on top of what I put in.  With the understanding that I could lose and come out with less than I started.  

Also, how does the transfer of funds work?  Do I have to set up an account for said services to draw from? 

[chipwhich]

Though he said like gambling, you spend your time in the red a lot as well.

 

Anyone who tells you investing in the stock market is like gambling should be a person you never take advice from investing ever again in your life.

[Dont Taze Me Bro]

Anyone who tells you investing in the stock market is like gambling should be a person you never take advice from investing ever again in your life.

I'll be honest, I have no idea what he does.  I really don't have a clue on the difference in all of this.  I know he told me would buy shares in company X and some went up and he was able to cash in and make money.  Then some went down and after holding on them a while hoping they came back up and didn't, cut his losses and cashed out.

 

But he has made a lot more money overall (long-term) than he started out with and is on the positive.  I think he gambling reference was more about the realization that you're going to miss on some things and come out with less money and you're gonna hit on some things and come out with more money.

Anyhow, I've always been interested in dabbling in this.  Just never pulled the trigger.  I look at what I waste/spend on food, gaming, etc. and feel like now is as good a time than any to start.  At least, long term, it could be an investment.

[Elessar78]

Dumb it down for me.  If one was wanting to start dabbling in buying stocks and selling, what is the best software/website to do this through?  A few years ago one of my friends was telling me that he did this and over the years has come out on the positive overall.  Though he said like gambling, you spend your time in the red a lot as well.

 

I thought he used some type of software, could have been web based.  I'm looking to play around with it, toss in some extra money, hope I hit on some things, make some cash on top of what I put in.  With the understanding that I could lose and come out with less than I started.  

Also, how does the transfer of funds work?  Do I have to set up an account for said services to draw from? 

You have to get an idea before you do anything else. A piece of software isn't going to do anything for you except execute trades. 

[chipwhich]

I think he gambling reference was more about the realization that you're going to miss on some things and come out with less money and you're gonna hit on some things and come out with more money.

 

Been in the stock market since my parents helped me buy stocks in the 1977-1978 time  I haven't lost a nickel in the market, and that's not bragging, just facts.  On paper I took a big hit in 2008 time frame, but am back on top.

 

I have lost some coin in a casino. 

[Dont Taze Me Bro]

You have to get an idea before you do anything else. A piece of software isn't going to do anything for you except execute trades. 

I just want to know what is the best software to use is and what should I start with?  I'm not looking to invest a lot of money starting out.  Lets say I have $200 to start out with.  

 

Walk me though what I need as far as software to monitor the market, make the trades and recommendations on what to start out with (ETF, stock market, day trades, etc.).  

 

What's the difference in all of those?  What is the safest?  What is the best chance to yield profit?  Etc.

Edited July 2, 2015 by Dont Taze Me Bro

[chipwhich]

I just want to know what is the best software to use is and what should I start with?  I'm not looking to invest a lot of money starting out.  Lets say I have $200 to start out with.  

 

Walk me though what I need as far as software to monitor the market, make the trades and recommendations on what to start out with (ETF, stock market, day trades, etc.).  

 

What's the difference in all of those?  What is the safest?  What is the best chance to yield profit?  Etc.

 

Pick a company you know, send them your $200, and select automatic dividend reinvestment.

There is no magical software.

 

In 30 years thank me.

 

https://www.directinvesting.com/search/no_fees_list.cfm

[Dont Taze Me Bro]

 

Pick a company you know, send them your $200, and select automatic dividend reinvestment.

There is no magical software.

 

In 30 years thank me.

 

https://www.directinvesting.com/search/no_fees_list.cfm

 

Thanks Chip.  Is there a way to set up an account like this for my daughter too?  Or does she have to be a certain age?

 

Edit:  I feel stupid.  My daughter already has an automatic dividend reinvestment in Duke Energy, one of my parents good friends bought her 1 share when she was 3 yo.  ****, wish I had thought about it.  I need to invest a lot of money in that per year for her.

Edited July 2, 2015 by Dont Taze Me Bro

[dchogs]

Thanks Chip. Is there a way to set up an account like this for my daughter too? Or does she have to be a certain age?

Edit: I feel stupid. My daughter already has an automatic dividend reinvestment in Duke Energy, one of my parents good friends bought her 1 share when she was 3 yo. ****, wish I had thought about it. I need to invest a lot of money in that per year for her.

Dude- don't invest your kid's college fund in one stock. Pick something simple and safe (market matching index fund with low costs) and let it ride there.

[chipwhich]

Thanks Chip.  Is there a way to set up an account like this for my daughter too?  Or does she have to be a certain age?

 

Edit:  I feel stupid.  My daughter already has an automatic dividend reinvestment in Duke Energy, one of my parents good friends bought her 1 share when she was 3 yo.  ****, wish I had thought about it.  I need to invest a lot of money in that per year for her.

 

What dchogs said, if you want to start a college fund, look at a 529 plan.

 

http://www.kiplinger.com/article/college/T002-C000-S003-the-best-529-college-savings-plans-2014.html

[techboy]

if ya want to be one of the average.

Yeah, see, that's the thing. EVERYONE is part of the average. That's how averages work.

There are two choices:

1. Use passive, low cost investments and accept that average, which has historically been enough to retire comfortably wealthy with a little care and patience.

2. Try to beat that, incurring greater costs, which GUARANTEESS that on average you'll do worse (that, again, is how averages work), and also taking the risk of doing MUCH worse, in the hopes that you'll get lucky and do well enough live like a rap video.

And now another piece of advice... you seem to be upset that I keep replying to you, but I have shared my data and I'm ready to move on. You'll notice I did not reply to the latest discussion of how to day trade, etc. I figure if people have the facts and still want to pursue a suboptimal approach, more power to them.

I'm not, however, going to ignore you if you continue to attempt to undercut the information I have presented. As I noted, the stakes are too high.

And so, if you really want me to stop posting in this thread, you need to stop yourself first.

[chipwhich]

And so, if you really want me to stop posting in this thread, you need to stop yourself first.

 

Is 100% of your net worth in the stock market?

[techboy]

Is 100% of your net worth in the stock market?

Fine. Let's do this then.

chipwich, I have never advocated placing 100% of one's net worth into the stock market. Never. I know you don't seem to understand that, which is why you keep hinting at it in many of your responses, but it's true. I even explicitly stated that my portfolio is a mix of low cost stock, bond, and real estate funds.

What seems to be confusing you is that the context of every conversation where investments have come up is stocks. That's not surprising, because stocks are sexier, and they also have a higher risk/return profile than bonds, so most people are going to need a good chunk of stocks to meet their retirement needs. Bonds just don't pay that much.

And so, to be VERY clear, for the stock portion of one's portfolio (which again is going to be the bedrock of the retirement of 99.9% normal people), the best approach is to invest in low cost, passively managed, broadly diversified funds. Any other approach, including every other idea floated in this thread, has been shown by the research to be suboptimal.

Most people should mitigate the risk of stock ownership with a chunk of bonds. I do that with low cost, passively managed funds as well, because the research shows that market timing and security selection aren't any more successful on the bond side. If one has the money, patience, and time, the actually optimal approach (because it's the lowest cost) is to buy individual government bonds, probably in a ladder, with terms matching future liabilities.

Research shows that the two biggest factors in a portfolio's success are cost and asset allocation, so an investor needs to decide on the appropriate stock/bond split, based on the need, ability, and willingness to take risk.

Personally, I follow the idea that no one should have more than 80% of the portfolio in stocks, both to reduce volatility (and the risk of bailing out at the worst time if stocks tank), and to allow for re-balancing.

This topic (and every other), though, is about stocks.

And, again, the optimal method for investing in stocks is to use broadly diversified, low cost, passively managed funds.

I hope that helps.

Edited July 3, 2015 by techboy